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Non-oil activity in the UAE accelerates at slowest pace in seven months: The UAE’s non-oil activity saw a “mild slowdown” in growth in March, with business activity continuing to improve, but at the slowest pace recorded since September of last year, according to S&P Global UAE PMI (pdf). The headline figure reached 54.0 during the month, down from 55.0 in February.
REMEMBER- The all-important 50.0 mark is the threshold separating contraction from growth. Anything above 50 denotes expansion, while anything below indicates contraction.
New orders and output growth slowed, as did employment: The new orders subindex fell to 56.3 in March, down from 57.3 in February, with businesses seeing continued strong competition and subdued growth in new export orders, Reuters writes. “A third consecutive month-on-month softening of new orders growth shows that some firms could be encountering challenges in meeting their sales targets,” S&P Global senior economist David Owen said. “Output growth eased to 59.6 in March while new orders growth slowed to its lowest pace in five months,” National Bank of Kuwait's Essa Ahmed told EnterpriseUAE. “Moreover, employment growth continued to slow, nearing the neutral benchmark at 50.2,” Ahmed added.
Input purchases rose sharply despite the slowdown: Businesses’ purchasing activity jumped to its fastest pace since mid-2019, with firms showing “resilience” in working to clear backlogs of work as evident from a concurrent dip in total inventories, Ahmed told us. Meanwhile, input prices rose at a moderate pace during the month, with some firms reporting a rise in material costs on the back of rising input demand, while others reported a drop in transportation costs, “reflecting firms’ efforts to preserve their profit margins,” Ahmed said.
“Hiring remains a significant concern, with March's employment rates marking the weakest growth in nearly three years. Given the elevated demand levels, this suggests that some firms could be struggling to locate suitable candidates,” Owen said.
Business sentiment remains positive: “Businesses’ sentiment remained optimistic over the next 12 months, buoyed by strong project pipelines and continued national development initiatives,” Ahmed said.
